Rewriting the Future of Work

Three common assumptions skew economists' forecasts of automation’s impact on employment. Addressing each is essential to protect workers’ rights and change the fatalistic storyline of the prevailing narrative.

TORONTO – Much has been written about the “future of work,” and much of it makes for gloomy reading. Study after study predicts that automation will upend entire industries and leave millions unemployed. A 2013 paper by two Oxford professors even suggested that machines could replace 47% of jobs in the United States within “a decade or two.”

Conclusions like these sustain the narrative that the future will inevitably be jobless. And yet this view is favored primarily by the corporate sector and supported by negative trends in the so-called gig economy; workers and trade unions have played little role in the conversation. If that were to change, the future of work could look very different.

Three common assumptions skew forecasts of automation’s impact on employment. Addressing each is essential to protect workers’ rights and change the fatalistic storyline of the prevailing narrative.

The first assumption is that fully automated jobs will displace workers in the near future. This view is little more than conjecture, and even those using the same data can draw different conclusions. For example, a 2017 McKinsey study, drawing on similar datasets as the 2013 Oxford research, found that only 5% of jobs in the US could be fully automated, but that about 60% of American jobs could be partly automated. In other words, automation does not mean that human work must disappear, only that it could become more productive.

If anything, current trends underscore why it is important to democratize how technology is built into business processes. When major corporations introduce innovations to speed up production – like handsets to time warehouse workers in Amazon’s facilities – the unintended consequence can be a decline in productivity. For many workers, the way that technology is adopted may be more relevant than the technology itself.

The second assumption is that automation will not benefit most workers. But people and politics – not machines – will determine how workers fare. If we accept the view that technology will increase overall productivity (a point that remains disputed given the low levels of productivity growth in OECD countries during the last decade), then workers and political leaders could focus on advocating for a better work-life balance. The fight for an eight-hour workday was waged more than a century ago, and the spaces created by the current discussion allow for negotiating a shorter working week. Some unions are already doing this; more should follow.

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Finally, despite the hype, automation is not the most pressing issue for labor. Technology can be disruptive, but the biggest concerns for workers today are the ones they feel most directly: underemployment, precarious employment, and stagnant wages. According to the International Labor Organization’s 2018 “World Employment Social Outlook,” 1.4 billion people worldwide are in “vulnerable forms of employment” in the informal sector, compared to 192 million who are unemployed.

To be sure, today’s new technologies are affecting workers in adverse ways. That has always been true, and people will continue to be displaced from one economic sector to another. But while technological innovation creates new opportunities, today’s gig economy, in particular, reflects how it can also weaken employees’ rights and increase economic insecurity. Workers’ fears are real, which is why the labor movement has been fighting to defend workers in vulnerable situations. Expanding the concept of Just Transition, currently used in climate-related dislocations, to technology-related disruptions would be a valuable innovation for ensuring that automation leaves no one behind.

But we should not accept the anxious narrative of a workless world. Technology and economic development are contested fields, and unions should focus on improving workplace conditions, organizing workers in new industries, and challenging the authoritarian business models that give employees little say over how their companies function.

Positive signs are emerging. Labor organizing is growing in the services sector. Employees are lobbying for better pay in some of the world’s largest corporations. And workers in the US are demanding – and often receiving – a living wage. The next step is to ensure that the effects of automation feature more prominently in union organizing. The future of work is not predetermined; the story is still being written. The most important question, as always, is who gets to wield the pen.

It is of course an over-simplification to say our future is jobless. Technology will indeed create many new opportunities, but these will increasingly be for the well educated with technical or creative skills that can command high levels of reward in the Global market place. However, the vast majority of the Global workforce do not have the necessary skills to compete for these high paid jobs. Instead they must sell their labour in a marketplace where Global arbitrage for low skilled work is driving down wages and benefits, while dramatically increasing insecurity and underemployment.

Unions simply dont have the power to reverse this Global race to the bottom, as employers, driven by a genuine need to remain competitive, now have more ways than ever to resist workers demands. They can automate jobs away, recruit cheaper immigrant labour, outsource production to countries with lower wage rates, or simply import goods and services more cheaply in the Global market place. The only way to reset the power balance between workers and employers is to provide a basic income for every citizen, which will give workers the power to say NO to jobs that no longer offer a fair days pay for a full days work.

Economists also continue to misread falls in national productivity, They are trying to apply 20th century understanding to 21st century problems. In the 1980s automation was used to increase output per worker, but in the 2020s new technology will replace the worker. This means that labour productivity is no longer the main constraint on economic growth, as it was in the decades when G7 economies were at full employment. The last 20 years has seen UK manufacturing shrink with a 30% reduction in high productivity manufacturing jobs, as heavy industry moved overseas. Displaced workers have either failed to find work, or have been forced to take lower productivity service sector jobs, on zero hours contracts, or in the gig economy. It is hardly a surprise therefore that national productivity growth has stalled, even while GDP and productivity in the new high tech firms has increased.

Whilst we must push hard for governments to provide for "just transition" through re-skilling, relocation, and re-investment in declining communities, we must also be realistic. Most governments are quite incapable of managing the scale and speed of transition we are now facing in the next decade. This is why the ultimate answer must be to provide a Basic Income which empowers citizens to become their own "Job Creators". Having a stable income independent of work will enable them to apply their own particular skills and abilities in their community, rather than forcing them to remain as unemployed "job seekers" searching for low skilled employment opportunities that will often no longer be found.

Hopeful or wishful? Sadly, it is more likely is that The Future of Work will Rewrite You.

You know your thesis is in trouble when you have to use positive McKinsey-ite evidence to argue the case for the viability of Organized Labor. It gives me no pleasure to say this, but it is crystal clear that Unionizing is already one of the lost battles of the 21st century. Dead horse: not gonna come back to life no matter how much you flog it. There is seemingly near full-employment in some first tier economies, but this is a last hurrah, before steepling levels of people obsolesce take a grip, in well under a decade. The truncation of human work is binary: when Driverless comes, which haulage and taxi drivers will be working in tandem with the self-drive technology to facilitate their work, do you think? Or will 60% of them nevertheless find a workplace in the cabin, by providing entertainment & conversation services to the other passengers and cargo?

On a more general point, have you considered the possibility that traditional left/right narratives are becoming close to meaningless in the face of accelerating tech driven change?

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